Commentary on Canadian Labour and Employment Law Issues

February 01, 2016

What do the words “without prejudice” mean? When we write these words on top of a letter to an employee, union or lawyer, what effect will this have? The Federal Court of Appeal recently considered this issue in Canada (Attorney General) v. Boogaard 2015 FCA 150 (CanLII).

In this case, a staff sergeant in the Royal Canadian Mounted Police (“RCMP”), had been seeking a promotion. He sent letters to the Commissioner of the RCMP. The Commissioner replied by way of a letter marked “without prejudice.” The sergeant considered the letter to be a decision rejecting his requests. The RCMP argued that the letter was privileged as it was a negotiation/settlement communication and, as evidence of that, was clearly marked “without prejudice.

The Federal Court found that the letter was not protected by the privilege over negotiation/settlement communications even though it was marked “without prejudice.” The Attorney General (“AG”) appealed arguing, in part, that the “without prejudice” letter was not a reviewable decision. The Federal Court of Appeal agreed with the Federal Court on this point.

The Federal Court relied on the Alberta Court of Appeal decision in Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd. 2013 ABCA 10 (CanLII) where the complicated issue of “privilege” was reviewed. Although some believe that putting the words “without prejudice” on correspondence will, as if by magic, shield the contents of the letter from production or disclosure in any lawsuit or litigation, that view is overstated. One thing is clear - simply writing the words “without prejudice” (often in italics and bold, sometimes underlined for further effect) means very little in the analysis.

The Court in Bellatrix put the matter as follows:

Settlement privilege is premised on the public policy goal of encouraging the settlement of disputes without the need to resort to litigation. It allows parties to freely discuss and offer terms of settlement in an attempt to reach a compromise. Because an admission of liability is often implicit as part of settlement negotiations, the rule ensures that communications made in the course of settlement negotiations are generally not admitted into evidence. Otherwise, parties would rarely, if ever, enter into settlement negotiations to resolve their legal disputes.

The parties must be permitted to freely “put all their cards on the table” without having to worry that they may be prejudiced should negotiations fall apart and litigation ensues. Courts have consistently maintained that to fall behind the shield of “settlement privilege”, there has to be “at least a hint of potential compromise or negotiation”. Back to Bellatrix:

..... an unconditional assertion of rights without any connection to the possibility of settlement or negotiation do not fall within the scope of the rule Buckinghamshire County Council v Moran, [1990] 1 Ch 623, [1989] 3 All ER 225 (CA), cited in Hansraj at para 19. Communications of this type do not offer any potential for compromise, which is the interest the privilege is intended to protect.

The notation “without prejudice” is not conclusive in establishing privilege. If the contents of a communication are truly in furtherance of settlement, and therefore privileged, it makes no difference whether the communication is marked “without prejudice” or not. A communication that is not in substance privileged does not become so just because one party places “without prejudice” on it. Likewise, the absence of the words “without prejudice” means nothing if the communication is truly privileged.

If the settlement privilege applies, a party will be precluded from admitting into evidence the document, which might otherwise be relevant to the issues in dispute. The policy reasons behind the privilege are paramount, but courts will be vigilant in ensuring that the communication meets the following criteria (see Costello v Calgary (City), 1997 ABCA 281 (CanLII)):

the existence, or contemplation, of a litigious dispute;

an express or implied intent that the communication would not be disclosed to the court in the event negotiations failed; and

the purpose of the communication must be to attempt to effect a settlement.

In the Boogaard case, the Court concluded that the Commissioners “without prejudice” correspondence denying the promotion was “tantamount to an outright refusal”. In other words, it was, to use the language in Bellatrix, an “unconditional assertion of rights without any connection to the possibility of settlement or negotiation”. Although the letter invited the sergeant to suggest an “alternative course” it was clear to the Federal Court and the Federal Court of Appeal that, looked at as a whole and in context, the letter did not fall within the test of settlement privilege and could not be shielded in the litigation (and in that case, from review).

Things you might take away from this

It is important in our work that we not proceed by rote, without understanding “why” things are as they are. Writing the words “without prejudice” on some correspondence is probably a good practice, but doing so will not have any meaning or implication where the underlying policy considerations are not present. The Boogaard case provides an excellent reminder.

Thus, while factors such as demeanor, the ability to recall events and to resist the tug of self interest are important in determining the credibility of a witness, the most significant consideration is the analysis of whose evidence makes the most sense in all of the circumstances. [emphasis added]

February 10, 2015

Arriving at the truth is the aim of any adjudication. But that’s easier said than done. Decision makers (judges, arbitrators, statutory bodies such as the human rights tribunal or labour relations board) have to assess the credibility of witnesses when weighing accounts of disputed facts Employers also must assess credibility in cases where a conflict about “what happens” is present. For example, when investigating a complaint of employee misconduct.

Assessing credibility is not a science. It is very difficult for a trial judge to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events.

A leading case is Faryna v. Chorny [1952] 2 D.L.R. 354 (B.C.C.A.) in which the Court of Appeal said:

If a trial Judge's finding of credibility is to depend on which person he thinks made the better appearance of sincerity in the witness box, we are left with a purely arbitrary finding and justice would then depend upon the best actors in the witness box. On reflection it becomes almost axiomatic that the appearance of telling the truth is but one of the elements that enter into the credibility of the evidence of a witness. Opportunities for knowledge, powers of observation, judgment and memory, ability to describe clearly what he has seen and heard, as well as other factors, combine to produce what is called credibility ... A witness by his manner may create a very unfavourable impression of his truthfulness upon the trial Judge, and yet the surrounding circumstances in the case may point decisively to the conclusion that he is actually telling the truth. I am not referring to the comparatively infrequent cases in which a witness is caught in a clumsy lie.

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried the conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. [Emphasis added]

Demeanour is a factor, but it can be a misleading factor. As an arbitrator stated in Quality Meat Packers Limited (2013) CanLII 15073 (ON LA):

…. although I have considered the demeanour of the witnesses when giving their evidence and the firmness of their professed recollections, I have placed greater emphasis on the clarity, consistency, and overall plausibility of every witness' testimony when compared to the testimony of other witnesses and tested by cross-examination; the ability of all witnesses to resist the influence of self-interest or self-justification when framing their answers; the consistency of witness testimony with the documentary material available to test recollection; whether the assertions of the witnesses were consistent with, or corroborated by, other objective evidence; and, what seems to me to be most likely in all the circumstances established by the reliable evidence

Assessing credibility is often very difficult. Obviously, it is non-scientific exercise (as the Supreme Court of Canada Gagnon).

The best we can do is ask how objectively speaking the witnesses story hangs together with “the preponderance of the probabilities”? Assessing credibility is a very human endeavour and like all human endeavours is uncertain and imperfect.

That said, appellate courts have shown great deference to trial judges findings of credibility. In R. v. W. (R.), [1992] 2 S.C.R. 122, McLachlin J. (as she then was) explained why courts of appeal must show particular deference to trial courts on issues of credibility. At the same time, however, she noted:

…. it remains open to an appellate court to overturn a verdict based on findings of credibility where, after considering all the evidence and having due regard to the advantages afforded to the trial judge, it concludes that the verdict is unreasonable.

But as a matter of principle, it seems to me that unreasonable findings of fact -- relating to credibility, to primary or inferred "evidential" facts, or to facts in issue -- are reviewable on appeal because they are "palpably" or "clearly" wrong. The same is true of findings that are unsupported by the evidence. I need hardly repeat, however, that appellate intervention will only be warranted where the court can explain why or in what respect the impugned finding is unreasonable or unsupported by the evidence. And the reviewing court must of course be persuaded that the impugned factual finding is likely to have affected the result.

It is a well-established principle that findings of fact made at trial based on the credibility of witnesses are not to be reversed on appeal unless it can be established that the trial judge made some "palpable and overriding error which affected his assessment of the facts”

In conclusion, the Supreme Court of Canada in H.L. v. Canada held:

With respect, I do not find persuasive any of the arguments advanced in support of the contention that the rules governing appellate intervention in Saskatchewan differ from those set out in Housen. On the contrary, I am satisfied for the reasons given that the standard of review for inferences of fact, in Saskatchewan as elsewhere in Canada, is that of palpable and overriding error and its functional equivalents, including "clearly wrong", "unreasonable" and "not reasonably supported by the evidence”.

…. narrative and recollection are strange. I think I clearly recall vivid or traumatic episodes in my life, starting with the time a pickup truck rammed the car in which I was riding with my mom as a pre-schooler in Jackson, Mississippi. I believe I'm sure that I was sitting in the front seat, in that era before seat belts or child safety-seats, and just missed hitting the windshield, being stopped by the padded dash. But maybe, this many years later, I'm fooling myself. There is no one else around who was there. Three or four times in the past 20 years, I've been in uncomfortable situations while flying an airplane. I think I could recount those episodes in second-by-second slo-mo detail. But I can't be absolutely sure.

Misremembering. This is a word that has been much in the news of late. When is someone lying and when is he or she simply not remembering something as it really happened? I recall reading an article in the Harvard Gazette several years ago that is still available online (Making sense of memory by Taylor Beck). Memory is a funny and complicated thing but these credibility principles are important in trying to get to the truth (whatever that is).

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